The UK government has become the latest developed nation to seek international funding for its domestic infrastructure projects.
Major international institutional investors have been invited to an event at London’s Downing Street hosted by the UK’s Regeneration Investment Organisation to showcase opportunities in three major cities: Birmingham, Bristol, and Leeds.
The move follows similar action by President Obama in July to tackle a lack of infrastructure in the US; a $1 trillion project launched by the World Bank in October; and Canada’s Caisse dépôt et placement du Québec signing up to a C$4 billion ($3.4 billion) set of local public projects, announced this month.
Insurer Legal & General (L&G) has thrown its support behind the UK venture, launching and committing £1.5 billion to a regeneration vehicle. A target of £15 billion has been set to be gathered from other investors and will support general regeneration work alongside housing and infrastructure spending.
A spokesman for L&G told CIO that the Regeneration Investment Organisation had invited around 30 sovereign wealth funds and large international investors to the event. L&G’s model is already being used for specific projects in other UK cities, meaning investors work with a local partner.
This latest project will look to invest further than the three cities highlighted at the event.
A note from Fitch ratings today showed the net gap in European infrastructure spend to have reached €36 billion in 2015, according to figures from DTZ. A lack of spending and financing from the banking sector has left the shortfall, which has not yet been filled by new investor cash.
